Eesti Energia net profit down fourfold year-over-year
National energy company Eesti Energia's EBITDA fell 8 percent on year, while net profit was down by €83 million or 78 percent.
Eesti Energia that presented its financials on Friday generated revenue of over €1 billion in 2019, with its EBITDA coming to roughly €260 million and net profit to €23.2 million. EBITDA was down by €23.4 million to €259.8 million and net profit by €83 million or 78 percent to €23.2 million compared to last year.
Total revenue grew by €120.9 million to €1.02 billion, with sales revenue growing by €81.2 million to €956.4 million.
"When it comes to business revenue, we had our best ever year that suggests we have done the right thing by developing renewable energy, liquid fuels and client services. Profitability took a hit because of major reorganization in energy production, but we had to react to the market situation to be able to face the future stronger," CFO Andri Avila said.
Avila pointed out as another factor affecting profitability amortization costs that grew by over €33 million last year. This was primarily caused by the Auvere power plant being added to the company's balance sheet.
"On the other hand, we are very glad to be able to say that steps to develop renewables have paid off. Eesti Energia's renewable energy subsidiary Enefit Green has become our most profitable venture in just a few years," Avila said.
Eesti Energia produced nearly 1.65 terawatt-hours of renewable energy in 2019 of which 1.28 terawatt-hours were electricity. The lion's share or 1 terawatt-hour was generated by wind farms in Estonia and Lithuania that proved reliable. The rest of renewable energy was produced using wood waste, solar and cogeneration plants.
The share of power generated from renewable and alternative sources grew from 13 percent to 36 percent. The company has set a strategic goal of having 45 percent of the energy it produces come from renewable and alternative sources by 2023.
Total power generation fell to 5.5 terawatt-hours (down 39 percent) in 2019. This was mainly caused by reduced oil shale energy production. The price of oil shale energy was affected by a 60 percent hike in the price of CO2 for an annual average of €24.9 per ton. The average price of electricity remained on par with last year.
Reduced oil shale power generation meant that the company's CO2 emissions were down 48 percent to 5.9 million tons in 2019. This reduced the CO2 emissions of Estonia by a quarter in a single year, making the country the fastest at curbing its emissions in the EU.
Eesti Energia produced 442,000 tons of shale oil for the company's all-time record in 2019. Production was up mainly due to improved reliability of the Enefit 280 mill and yield improvements.
Sales revenue of EE subsidiary, transmission service provider Elektrilevi was down due to lower tariffs that left consumers with an extra €20 million compared to a year ago. The price drop was made possible by effective management of Elektrilevi and favorable interest rates.
Eesti Energia's investments were down 30 percent to €136 million. The company spent €83 million on improving network reliability. Investments volume fell as the Auvere power plant investment was concluded when Eesti Energia took possession in 2018.
"It was a complicated year full of challenges. We are planning on surprising our clients with several new services this year. I believe that as energy professionals, we can offer the newest and best technologies in a rapidly changing world," Eesti Energia CFO Andri Avila said.
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Editor: Marcus Turovski